Lsbcal
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DS has a "serious" girlfriend. The other day he mentioned that one financial advisor article suggested buying a house might not be such a great use of money for young adults i.e. it might be better to rent and invest in stocks instead. I know that this can be somewhat painful as home price appreciation, especially in California, can drive people crazy if they are renting.
My short answer was that you really have to look at the numbers and there was not a simple one-size-fits-all answer to this. I kept the answer short because he doesn't get too focused on investing for long. He is a very hard worker though and that is probably best for him right now.
So I looked around for a decent calculator that encapsulates some of this issue. Here is one that seems to almost fit the bill: https://financialmentor.com/calculator/rent-vs-buy-calculator. Some of the things to estimate that I think are very tough are:
maintenance and upgrade costs (including first time appliance/furniture)
rate of return on savings
rate of appreciation on house/condo (living in San Diego, California)
number of years you will stay in same house
With the 2019 tax laws, it seems that even for a fairly high income couple the tax break for housing is gone. In other words, they are unlikely to do much better itemizing (includes mortgage interest and RE taxes) then with the 24k standard deduction. If they do itemize and come up with say 28k in deductions, then the tax benefit is there but much reduced over the past tax law advantage.
Any thoughts or better sources of information on rent versus buy?
My short answer was that you really have to look at the numbers and there was not a simple one-size-fits-all answer to this. I kept the answer short because he doesn't get too focused on investing for long. He is a very hard worker though and that is probably best for him right now.
So I looked around for a decent calculator that encapsulates some of this issue. Here is one that seems to almost fit the bill: https://financialmentor.com/calculator/rent-vs-buy-calculator. Some of the things to estimate that I think are very tough are:
maintenance and upgrade costs (including first time appliance/furniture)
rate of return on savings
rate of appreciation on house/condo (living in San Diego, California)
number of years you will stay in same house
With the 2019 tax laws, it seems that even for a fairly high income couple the tax break for housing is gone. In other words, they are unlikely to do much better itemizing (includes mortgage interest and RE taxes) then with the 24k standard deduction. If they do itemize and come up with say 28k in deductions, then the tax benefit is there but much reduced over the past tax law advantage.
Any thoughts or better sources of information on rent versus buy?